Corporate Governance

Corporate Governance:

An Antidote to Corruption

I. Introduction

Bribery, extortion, graft, embezzlement are just few of the whiny faces of corruption. In some countries, corruption is so common that it is as expected as a handshake wen ordinary people or businesses deal with government officials. It's almost as if that in the future, people would already see it as normal and acceptable.

In a recent study, researchers hypothesize that corruption - the misuse of an office for private gain - leads to the unwanted inflation of employee ranks and thus greater operational efficiency. And this result to a less favorable business climate and in the end serves as a serious drag on a nation's wealth.

It's already a revelation that corruption is concomitant with lower GNP per capita, and lower investments and growth rates. Frankly speaking, corruption damages nations by making firms become inefficient. It's a contagious problem that's not only present in our government today but also within big and/or small organizations today. And why corruption is rampant and inevitable? The obvious answer would be, because of the selfish interests of the doers who consciously destroy not just the organization's reputation but also the livelihood of the innocent people in it.

There are several wicked corruption-related scenarios in recent researches that may inflate employee ranks. An example is that a manager may be hiring more employees not so the firm can do a better job, but simple so that his own job can be made easier. "Where corruption comes in is that the manager may be influencing a regulatory official to, in turn, allows the firm to hike electrical prices to accommodate the cost of these employees," explains Dal Bó. Hence, it hurts the economy because it unnecessarily raises the costs of electricity to consumers, including industry. Moreover, by not being put to more productive work, those extra employees represent "missing wealth" to the country, the researchers say. This example and other more tactical actions that corruptors do are the reasons why our economy faces a big problem that is being solved for years and up until now, becomes even harder to do so because of the wrong use of technology and innovations; plus the growing number of persons, in position, who use their power to hide their nefarious actions.

The abuse of power is a relative issue. However, though the quest for killing corruption is difficult, there is actually an effective way to prevent it. And that is the proper and diligent execution of Corporate Governance. This paper would like to present the role of Corporate Governance on stopping corruption and its destructive effects in our country's economy.